Gas Turned off at Esmark’s Still-Closed Yorkville Plant

March 1, 2013

YORKVILLE - Esmark Inc. hoped to make cold-rolled steel products at the former Wheeling-Pittsburgh Steel mill it acquired last year as part of RG Steel's bankruptcy and liquidation for $4.7 million.

However, the only thing cold in the building now may be the temperature because Columbia Gas of Ohio shut off service to the structure after Esmark declined to pay the natural gas bill at the facility it renamed the Ohio Cold Rolling Co.

"We have been working with the local natural gas and electric utility companies and agreed to temporarily suspend natural gas service to the plant until we're prepared to begin restart operations. We continue to maintain electric service for our water treatment plant and a small work force for fire watch and ongoing maintenance," said Esmark spokesman Bill Keegan. "We remain committed to restarting the Yorkville facility in an orderly process and, hopefully, in a less volatile steel market."

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Photo by Casey JunkinsAs the RG Steel logo outside the Yorkville plant has faded, Esmark Inc. officials are still waiting to restart the mill they purchased and renamed the Ohio Cold Rolling Co.

But United Steelworkers Local 1223 President Jerry Conners is losing confidence in the plant's new owners.

"I have a hard time believing the plant is on track for a reopening. I do think either Esmark, or the Esmark Steel Group, is experiencing a cash flow problem," Conners said. "Gas for heat has never been turned off in the past."

Esmark Steel Group is the subsidiary of Esmark Inc. charged with overseeing what is now known as the Ohio Cold Rolling Co. After acquiring the Yorkville plant last summer, Esmark needed to address some environmental issues at the site.

Late last year, union members voted 194-24 to accept Esmark's contract offer in hopes of getting back to work early this year. Conners said the average employee wage in the Esmark deal is set at $21.64 per hour, down from about $26 per hour under the last RG agreement.

Since then, however, about the only thing Esmark seems to have done at the property is fade out the RG Steel logo on some of the signs near the plant entrance. Initially, Esmark officials blamed the "fiscal cliff" negotiations that took place between Democrats and Republicans in Washington, D.C., in late 2012 as one of the reasons they would be delayed in restarting the Yorkville mill.

Now, Esmark cites three reasons to not restart the plant:

"These economic factors, and continued market volatility, have all contributed to our decision to idle the Ohio Cold Rolling facility - and discontinue certain services until the facility is brought online later this year," Keegan said.

Esmark acquired all the former Wheeling-Pitt facilities in 2006 before selling them to OAO Severstal in 2008. Severstal later sold the plants to RG, which filed for bankruptcy last year.

Last summer, Esmark leaders considered purchasing the downtown Wheeling RG Steel headquarters. However, Chairman and Chief Executive Officer James P. Bouchard ultimately decided against making a bid.